Fake Reviews and Brand Pimping: Who Wins and Who Loses

Some consumer review sites are happy to turn a (partially) blind eye to fake reviews, because they're driving revenue.

Fake Reviews and Brand Pimping: Who Wins and Who Loses
Photo by Edilson Borges / Unsplash
  • While consumer review sites police fake reviews, they do so unevenly and often with seeming ambivalence.
  • That's because the business owner/advertiser is their customer not the consumer, who is ultimately hurt by fake reviews.
  • With LSAs, Google is now directly monetizing fake reviews because they help generate leads, which the company gets paid for.  

Fake reviews are a huge problem. You already know that.

Recent research my company conducted with Uberall found that potentially hundreds of millions of online reviews are fake. We looked at more than 4 million reviews on the four leading review sites, including 1 million on Google. We found that Google was the site with the highest fraud: 10.7% of reviews were suspect or inauthentic (this is probably conservative).

Some verticals on Google had higher fake review rates, such as moving companies (22.3%), plumbers (21.4%), locksmiths (20.3%), digital marketing agencies (15.3%) and a few others.

Google says it removes millions of fake reviews every year, though millions more remain. Why?

The Review Fraud Cycle

We’re now at a point where it appears some major internet brands are happy to sell ads to businesses with fake positive reviews. The likely explanation is that it helps them (the sites) generate revenue.

Let’s break it down, so I don’t sound like a paranoid conspiracist.

It starts with businesses purchasing fake positive reviews – most review fraud is perpetrated by business owners or on their behalf. They do this to rank and establish credibility with potential customers. Those positive reviews help businesses generate revenue, which can then be spent on marketing and advertising. This sounds simplistic, yet that's effectively how it works.

Source: The Transparency Company

Review sites are often ambivalent about removing fake positive reviews. While fake reviews ultimately hurt consumers, who rely on them to make buying decisions, the consumer is not actually the "customer."

The advertiser is the review site's actual customer. This is something I’ve discussed with the FTC more than once. Consumers are the product. And they’re being sold for revenue using deceptive marketing practices, every single day.

Review sites must decide how aggressively to "prosecute" review fraud. If they do nothing they face media condemnation. So they remove fake reviews but not with equal enthusiasm. Generally speaking, Yelp and TripAdvisor do a better job than others (read: Google).

Source: The Transparency Company

Turning a partial blind eye to review fraud generates a win-win for big tech and their advertisers. Consumers are getting the short straw.

LSAs and the Google Guarantee  

Let’s start at the beginning of a consumer buying journey, with creating awareness. And let's use the search query: "Los Angeles Moving Company."

For this set of keywords, Google shows three Local Services Ads (LSA) featuring Google Guaranteed local businesses with reviews. These trust signals motivate many consumers to click and follow up with at least one of them.

The placement of these ads at the top of the page and the presence of ratings generates awareness and motivates consideration, ultimately converting a percentage of searchers into paid leads. Once the user clicks on an LSA listing, there’s a call to action. This moves the consumer to the next phase, decision making.

The badge "Guaranteed" beside reviews might imply vetted or trusted. But Google isn’t guaranteeing the veracity of reviews. The Google Guarantee is a limited consumer satisfaction insurance policy which applies, "if you are not satisfied with the quality of the service provided, up to a lifetime limit of $2,000."

The Guarantee is another tool Google uses to help convert the consumer into a lead for the business owner. As Google says in its promotional copy, "A Google badge gives you extra credibility and gives customers more confidence to book your services."

There are LSA advertisers who are well documented review offenders. Positive reviews improve advertisers' chances of being in one of the top three ad positions and beating the other two shown at the top of the SERP.

With LSAs, advertisers only pay Google once consumers contact the businesses. The cost per acquisition is notably lower than conventional PPC. With traditional Google Ads, Google is paid by the click. The company isn’t involved with conversions other than tracking them in Google Analytics.

Fake Review Monetization

With LSAs, Google is directly involved in trying to boost conversions or the ads won’t generate revenue. Reviews are now directly connected to monetization.

One might expect monetized LSA reviews to be even more transparent than non-monetized Google Business Profile (GBP) reviews. But it’s actually the opposite.

Source: The Transparency Company 

LSA reviews aren’t connected to GBP, so you can’t click on a reviewer’s name to learn more or assess the legitimacy of any individual review. Effectively, Google has shut down the possibility of further diligence for consumers and third party verification technologies like The Transparency Company.  

It’s as if the company is saying "Nothing to see here," even though LSAs are driving meaningful revenue (Google doesn’t break it out). I’ve also heard from multiple Platinum Google Product Experts that Google isn’t even listening to queries about removing fake LSA reviews.

This is a prime example of brand pimping: "Use our brand, pay us money. Little else matters."

Curtis Boyd is the founder and CEO of The Transparency Company. Follow him on Twitter at @DataBoyd